What are regulations on VAT calculation in Vietnam from July 1, 2025?

What are regulations on VAT calculation in Vietnam from July 1, 2025?

Based on Article 7 of the Law on Value-Added Tax 2024, specific regulations on VAT calculation prices are as follows:

[1] The tax calculation price is determined as follows:

- For goods and services sold by the business entity, the price is the selling price excluding VAT; for goods and services subject to special consumption tax, it is the selling price including special consumption tax but excluding VAT; for goods subject to environmental protection tax, it is the selling price including environmental protection tax but excluding VAT; for goods subject to both special consumption tax and environmental protection tax, it is the selling price including both taxes but excluding VAT;

- For imported goods, it is the taxable import price as per the law on export and import tax plus import tax and any additional import taxes as legislated (if applicable), plus special consumption tax (if any), and plus environmental protection tax (if any);

- For goods and services used for exchange, internal consumption, gifts, and donations, the VAT calculation is based on the value of similar or equivalent goods and services at the time these activities occur. For goods and services used for promotion as per the commercial law, the tax calculation value is zero (0);

- For asset leasing activities, it is the rental amount excluding VAT. If rental payments are periodical or paid upfront for the lease term, the tax value is the rental amount paid per period or upfront, excluding VAT;

- For goods sold under installment or deferred payment, it is calculated based on the one-time sales price excluding VAT, not including installment or deferred interest;

- For processing goods, it is the processing price excluding VAT;

- For construction and installation activities, it is the value of the project, project items, or handover work, excluding VAT. If construction and installation do not cover materials, machinery, and equipment, the tax calculation excludes these material and equipment values;

- For real estate business activities, it is the selling price of real estate excluding VAT, minus land levy or land rent paid to the state budget (deductible land value). The Government of Vietnam regulates the determination of deductible land value in line with land laws;

- For agency, brokerage for goods sales and service providers receiving commissions, it is the commission earned from these activities excluding VAT;

- For goods and services using invoices with the payment price including VAT, the tax calculation is determined by the following formula:

- For casino, electronic gaming with prizes, betting services, it is the revenue from these activities minus the money exchanged back to customers not fully used and prize money paid to customers (if any), including special consumption tax, excluding VAT;

- For production and business activities including: electricity production by Vietnam Electricity Group; transportation, loading and unloading services; tourism services as tours; pawnbroking; VAT-taxed books sold at the publication price (cover price); printing activities; agency assessment services, compensation claim agency, third-party claim agency, compensation handling agency 100% earning wages or commissions, the tax calculation is the selling price excluding VAT. The Government of Vietnam stipulates the tax calculation price for production and business activities here.

[2] The tax calculation price for goods and services defined in clause 1, Article 7 of the Law on Value-Added Tax 2024 includes surcharges and additional fees that the business entity is entitled to.

What are regulations on VAT calculation in Vietnam from July 1, 2025? (Image from the Internet)

Which entities shall pay VAT in Vietnam from July 1, 2025?

Based on Article 4 of the Law on Value-Added Tax 2024, specific regulations on VAT payers are as follows:

- Organizations, households, individuals manufacturing, trading goods and services subject to VAT (hereinafter referred to as business establishments).

- Organizations, individuals importing goods subject to VAT (hereinafter referred to as importers).

- Organizations, individuals in Vietnam purchasing services (including linked services with goods) from foreign organizations without a permanent establishment in Vietnam, individuals abroad not residing in Vietnam, except for those regulated in clauses 4 and 5, Article 4 of the Law on Value-Added Tax 2024; organizations in Vietnam purchasing goods and services for oil and gas exploration and exploitation activities from foreign organizations without a permanent establishment in Vietnam, individuals abroad not residing in Vietnam.

- Foreign suppliers without a permanent establishment in Vietnam engaging in e-commerce, digital platform-based business with organizations, individuals in Vietnam (hereinafter referred to as foreign suppliers); organizations as digital platform managers abroad deducting, paying in lieu of tax obligations on behalf of foreign suppliers; business organizations in Vietnam applying the VAT deduction method purchasing services from foreign suppliers without a permanent establishment in Vietnam through e-commerce channels or digital platforms that perform deduction, payment in lieu of the foreign supplier's tax obligations.

- Organizations as e-commerce platform managers, digital platform managers having payment functions, performing deduction, tax payment on behalf, declaring the deducted tax for business households, individuals trading on e-commerce platforms, digital platforms.

What are regulations on time for calculating VAT in Vietnam according to the Law on Value-Added Tax 2025?

Based on Article 8 of the Law on Value-Added Tax 2024, specific regulations on the time for determining VAT are as follows:

[1] The time for determining VAT is regulated as follows:

- For goods, it is the time of transfer of ownership or right to use goods to the buyer or the time of issuing the invoice, regardless of whether money has been received or not;

- For services, it is the time of completion of service provision or issuance of the service provision invoice, regardless of whether money has been received or not.

[2] The time for determining VAT for the following goods and services is regulated by the Government of Vietnam:

- Export and import goods;

- Telecommunications services;

- Insurance business services;

- Activities of supplying electricity, producing electricity, and clean water;

- Real estate business activities;

- Construction, installation activities, and oil and gas activities.